What is EPL Insurance? Covering Your Law Firm with Employee Practice Liability Insurance

December 18, 2015

In 2017, over $355.6 million in wrongful employee practice claims were settled in court.1 These claims included charges against equal pay, pregnancy discrimination, sexual harassment, race discrimination and more. An employee practice liability (EPL) insurance policy is the best way to ensure your law firm is protected against the financial damages from employee claims.

Think your law firm isn’t at risk for a costly claim? Consider these scenarios:

Wrongful Termination

Even if your terms of employment include an “at-will” clause, your law firm could still be at risk for a wrongful termination suit. For example:

Your office manager has always had an issue with one of your paralegals; however, this particular employee is diligent in her job and is often praised by her fellow co-workers. One day, your office manager decides she no longer wants to work with the paralegal and fires her. Your current employee handbook states that all employees will receive one verbal and one written warning before termination can take place.

Sexual Harassment

Legal firms, both large and small, should have firm sexual harassment policies and procedures in place. Even with proper training, sexual harassment can still occur. Consider this scenario:

As a small firm, you pride yourself in the report you have with your employees. One day, your head secretary comes to you with a concern about inappropriate jokes she’s overheard from your partner. While these comments are never directed towards her, she is still offended by the content. You tell her you understand and that you will speak with your partner. Unfortunately, the jokes continue.

Gender Discrimination

While gender should never factor into decisions that affect hiring, pay, promotions or job classifications, even unintentional discrimination can happen in the work place.

A mid-level associate position becomes available and you decide to leave the promotion decision up to your current mid-level associates, a group comprised mostly of males. Many questioned the group’s decision to pass up a female junior associate with outstanding qualifications for a male junior associate with less seniority and average recommendations.

As the examples above show, claims based on employment practices can stem from all levels. That’s why it is extremely important that all firms have an EPL insurance policy in place. Without it, these often damaging claims could cost your firm hundreds of thousands of dollars.